New Jersey’s labor market entered 2025 with caution, but by year’s end the state was contending with one of its most turbulent periods in more than a decade. Nearly 100 employers filed formal WARN notices throughout the year, signaling job losses affecting more than 13,000 workers across sectors that traditionally anchor New Jersey’s economy. The scale and frequency of these announcements have reshaped conversations around the state’s business climate, investment appetite, and the likelihood that broader economic turbulence may surface in 2026.
Corporate downsizing has been attributed to a mix of structural and cyclical pressures: industry consolidation, aggressive cost-cutting efforts, strategic restructuring, technological displacement driven by AI, and declining revenue in mature markets. The ripple effect from these decisions is being felt statewide, touching industries ranging from pharmaceuticals to logistics to retail, many of which are historically among the state’s top employers.
The pharmaceutical sector, long considered one of New Jersey’s most reliable economic pillars, experienced some of the largest workforce contractions. Bristol Myers Squibb initiated multiple rounds of reductions, eliminating 1,156 positions at its Lawrence campus as part of a sweeping reorganization of its global operations. Novartis also delivered major cuts, with 485 U.S. jobs tied to its East Hanover leadership structure being eliminated as part of a strategic consolidation designed to streamline overlapping functions.
Retail operations faced an equally disruptive year. Rite Aid, navigating its bankruptcy restructuring, shuttered every New Jersey location, displacing 1,122 employees across the state. Several consumer-facing brands also recalibrated their brick-and-mortar presence. Bahama Breeze’s parent company, GMRI Inc., closed four New Jersey restaurants, resulting in 327 additional layoffs and signaling a broader slowdown in the casual dining segment.
Corporate and financial services, once viewed as stable due to New Jersey’s proximity to New York City, were not immune. Walmart announced 668 layoffs as it migrated corporate roles from Hoboken to its Arkansas headquarters. J.P. Morgan Chase executed layoffs in four separate rounds from its Jersey City offices, terminating 417 employees amid a shift toward more automated and centralized operational models.
The logistics sector, a major employer in the central part of the state, also retrenched. GEODIS Logistics cut 426 positions in Monroe Township after the departure of a major client, underscoring the vulnerability of warehousing and distribution jobs to sudden changes in contract pipelines.
With reductions touching every corner of the economy, displaced workers have had to navigate a complex and fast-moving environment. The New Jersey Department of Labor and Workforce Development continues to offer guidance on unemployment benefits, training programs, and career-transition support, although the influx of claims and inquiries has highlighted the strain on state systems as companies continue to downsize.
Economic analysts are increasingly drawing connections between these job losses and the possibility of a regional downturn. Senior economists at Moody’s have publicly used recessionary terminology when describing New Jersey’s labor market, pointing to sustained employment declines and slowing economic activity as contributing factors. Private-sector analysts have also noted the volatility of the labor market. The nearly 100 WARN filings recorded this year represent one of the highest totals in more than a decade and are widely viewed as an early signal of weakening business confidence.
Business sentiment data reinforces this narrative. A survey by the New Jersey Business & Industry Association found that only 30 percent of companies reported profitability in 2025. Even more concerning, 41 percent of respondents anticipated that the state’s economic climate would deteriorate during the first half of 2026, citing uncertainty, regulatory costs, and a reluctance to pursue major expansions. For organizations monitoring statewide trends, additional analysis is available through platforms covering the local business environment, such as those found under the business category on Explore New Jersey.
While certain national forecasts suggest that the U.S. may sustain slow but positive GDP growth through 2026—potentially stabilizing the labor market later in the year—New Jersey continues to lag behind the broader economy. The state’s unemployment rate, at 5.0 percent in August 2025, sits above the national average, widening the gap between local and national performance metrics. Complicating matters are New Jersey’s elevated energy costs, tariff pressures affecting manufacturing operations, and one of the country’s highest effective corporate tax burdens. These conditions have made some companies reluctant to expand or invest, particularly in capital-intensive industries.
New Jersey’s layoff surge mirrors national concerns about what some economists describe as “permanent restructuring” across sectors like technology, finance, retail, and pharmaceuticals. The rise of AI-driven automation, ongoing mergers and acquisitions, and shifts in consumer behavior are reshaping employment patterns on a national scale. The state’s WARN data provides a concentrated look at how these forces can manifest at the regional level, and why early indicators from 2025 may foreshadow a broader economic contraction in 2026.
Whether the state avoids recession will depend on several factors: stabilization in key industries, renewed business investment, and federal conditions such as interest-rate policy and tariff environments. For now, New Jersey enters the new year navigating uncertainty, cautious optimism, and the hope that strategic planning at both the business and government level can blunt the impact of a challenging economic cycle.
